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IBM still hammering out China factory ownership

If Lenovo moves into a facility IBM co-owns, it would be working side by side with its domestic archrival.

Although IBM will sell the assets of its PC unit to China's Lenovo, an unusual wrinkle has emerged with the sale of its factory in Shenzhen, China. The factory--which manufactures laptops for the Chinese market--is technically property of International Information Products, a joint venture owned by IBM and Great Wall Technology. Great Wall and Legend are archrivals, creating a situation akin to having Dell and Hewlett-Packard share a building.

An IBM spokesman stated that IBM will transfer its part of the venture to Lenovo and is trying to craft a solution for determining what to do with Great Wall's interest. Although Lenovo is buying IBM's PC group, the Shenzhen factory is one of the few manufacturing facilities IBM still owns. It sold its PC facilities in the United States to Sanmina-SCI in 2002.